Mercia Asset Management PLC (MERC.L) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Mercia Asset Management PLC investor presentation. [Operator Instructions]. The company may not be in a position to answer every question received during the meeting itself; however, the company can review all questions submitted today and publish responses where appropriate to do so. Before we begin, I'd like to submit the following poll. And now I'd like to hand you over to Mark Payton, CEO. Good afternoon, sir.

Thank you. Good afternoon, and welcome, everybody, and thank you for joining both Martin and I to present our FY '25 preliminary results. And for those that have traveled to Birmingham, Birmingham New Street, you'll recognize Aussie that sits in Birmingham New Street, and Martin and I are coming from our Birmingham office today. Just as introductions, I'm the Chief Executive, Co-Founder of Mercia, approximately 15 years now of commercializing technologies, but more importantly, investing into businesses, growing businesses and either exiting them through IPO, but more often through trade sales.

Yes. Good afternoon, everyone. I joined Mercia over 10 years ago now to float the business with Mark when there was just a small handful of us. Mercia is my fourth listed company as CFO, and most of my career has been spent in and around technology-related businesses.

Thanks, Martin. So today, we'll talk a little bit about Mercia, our model, the market opportunity that we're facing. Martin will give a more detailed review of the finances of the group. We'll talk about the progress over this period and our outlook and in summary for the group going forward. So for those that have not heard of Mercia, what is Mercia? Well, we are a fast-growing, scalable alternative asset manager. We're one of the leading providers now across the U.K., aiming to see and source deals that others don't necessarily see. We focus exclusively on the U.K., where there are multibillions per annum invested. And we look to private capital deployment through debt and private equity, what we term together as development capital, property finance and venture and moving the group now towards real assets in parallel rather than instead of. We have been building, over the last 10 years, a highly differentiated deal origination platform to see the best deals and win the best deals, and that's through our footprint across the U.K. and our regional offices. Now with the growing and increasing opportunities that we're investing against, we are now building a sales and distribution platform across retail and predominantly now across institutional investment. Martin mentioned joining us 10 years ago, and this is very much a sort of 10-year celebration actually on AIM. And at the point when we started Mercia, that was 15 years ago now, it was really to address this observation. And these are the most recent results from 2021, where 12,600 high-growth businesses in the U.K., 21% of those are based in London. However, somewhat alarmingly, 66% of all capital deployed are into those 21% of the businesses, those high-growth businesses. And high growth is defined as growing at 20% growth in employees per annum averaged over 3 years. And so why is that? And our strong belief then, as it is today, is you've got to be physically based where those opportunities are. And we've got offices across the U.K., you can see where they are there. And we are sourcing about 90% now of our investment transactions are outside of London. We do have a London office, we do transact out of our London office, but we are truly pan-national. And this shows the pace of growth of the group. So financial year '25, this reporting period, has been the strongest in terms of capital deployment that we've made, GBP 284 million. You can see the red dots on the left figure there where those transactions have occurred across the country. GBP 131 million into venture businesses and of that circa GBP 10 million into our direct assets, and I'll talk to those later. GBP 72 million into development capital and GBP 81 million into property financing. And we've backed brands that some of you will be familiar with, but when we backed them, they were unknowns. Kirsty's, and you'll see those they are gluten-free, dairy-free products. You'll see them in Asda, Tesco, Sainsbury's, they are most major supermarkets. Oddbox, Pure pet food based up in Newcastle. Harrogate Spring Water, we've lent money to repeatedly over the past. And the other names that you may not have heard of today, you will do over time as they continue to grow. So a really strong stable of businesses, a majority of those out in the U.K. regions. Last year, we started our 3-year plan, which we termed Mercia '27, where we said we would grow assets under management over 3 years from GBP 1.8 billion to GBP 3 billion. We will grow EBITDA from GBP 5.5 million to GBP 10 million and grow the EBITDA margin from 18.2% to 26%. And as you may have seen with the results today, we're very pleased with the progress, and we are more than capable of achieving this 3-year objective across these 3 areas. We're at GBP 2 billion now in AUM, GBP 7.6 million EBITDA and a 22.1% EBITDA margin. We also made a commitment last year to look to divest up to 70% by value of our direct investments, as we look to simplify the business as a focused third-party fund management business. Now we said in this financial year gone by that we would not expect any exits and that exit will start to appear at the back end of FY '26 and into FY '27. We don't change that position in terms of our belief in the exit timing. But during FY '25, we did experience a small investment, one of our smaller businesses in the portfolio, which generated a return of GBP 600,000. Other key milestones within this financial year include the appointment of Dean Heaney as Head of Institutional Distribution, as we look to grow our institutional base. And on that basis, we've closed our first -- we had the first close of our new GBP 82 million institutional fund, Mercia Evolution Fund. We've seen third-party capital raises across the 3 discrete pools of capital we manage: retail, institutional and public sector, which is predominantly British Business Bank for us. And that collectively has resulted in net fund inflows of circa 15% when looking across the financial year and into the tax year-end to the 5th of April. As I've mentioned, we've had a record deployment of GBP 284 million into 165 businesses, and importantly, 87 of those new to House. And the opportunity we face is driven by a number of features here. GBP 9.1 trillion in investable capital is held within the U.K., predominantly invested overseas, circa GBP 2 trillion of that being retail capital. A number of you may be familiar with the Mansion House Compact and the Mansion House Accord. The Compact was a statement of intent to turn DC pensions towards putting 5% of their growing allocations to domestic basis into the private capital markets. The Mansion House Accord builds on the compact with 17 signing up across the pension and insurance industries. And this combines really with Solvency II Act changes, Solvency U.K. reforms and also a growing emphasis on place-based impact investment. And we're seeing that particularly with the local government pension schemes and also new structures brought in like LTAFs and certain platforms allowing funds to access a diverse portfolio of assets, but always pointed domestically, always on a regional deployment basis as well. And we're extremely well placed. And put this into context, the 5% growth in terms of redirecting capital into the U.K. is estimated to be at least GBP 16 billion in value by 2030. And the remarkable thing here with the U.K. is it's the second largest behind the U.S. holder of investable capital and actually accounts for about 8% to 10% of the global capital comes from the U.K. So you can see why reforms and interest are there to redirect capital into the U.K., into the private markets. And as a regional-based investor, we think we are extremely well placed for those tailwinds coming.

Thank you, Mark. This first slide in the finance section summarizes our financial performance for the year ending 31st of March 2025. As you can see, we've increased our revenues by 13% during the year and our EBITDA by 37%, showing the economies of scale that Mercia is now achieving. Our progressive dividend policy started in 2020, and I'm pleased to say that our Board is recommending a proposed final dividend per share of 0.58p, just over a 5% increase on the prior year. We manage our business carefully and at the year-end, we retained GBP 40 million of cash and no debt. Our net assets per share have nudged up during the year to 43.6p. And at the end of the year, we are now managing GBP 2 billion of assets under management, which I'll speak to in more detail shortly. During the course of the financial year and the 5 days up to the tax year-end, we achieved inflows of GBP 316 million. And at the end of the period, we have GBP 640 million of dry powder. This slide shows our sustained organic growth during the year in revenues, EBITDA and operating cash generation. Starting with the first chart on the left, you can see the growth there in revenues, and we are managing to maintain our 2% blended fee margin across our asset categories. All of this revenue growth was organic. 81% of our revenue comes from our fund management operations, our contracted revenues being fund management fees and also direct monitoring fees and the remaining 19% comes from transaction-related revenues. Of our total revenues, 98% is now coming from our fund management business and only 2% is coming from our direct investing balance sheet activities. Looking at the EBITDA performance and the growth in EBITDA, which is up 37%. I think what's interesting is that over the last 2 years, we've grown our assets under management by GBP 600 million, and that is what is helping to drive now the economies of scale in our business. And of that GBP 600 million growth in the last 2 years, what I think is quite interesting, showing the evolution of the balance of our asset classes is that 47% of that GBP 600 million was new equity inflows, but 53% was new SME lending inflows as well, showing again, as I've said, the maturing and the diversification of our asset classes. And over on the right-hand side, you can see that not only are we generating growth in EBITDA, but we are turning that EBITDA into cash. And for the second year running, our cash generated from operating activities was higher than the actual reported EBITDA. Against a continuing challenging market backdrop for many asset managers, this slide shows our growing assets under management with GBP 237 million fund inflows during the financial year and a further GBP 79 million just after the year-end. There were no redemptions in any of our mandates at Mercia and the only reductions in AUM of any magnitude was distributions to our many Mercia stakeholders, which includes the shareholders of our 3 Northern VCTs, our LP fund investors where we are making investment returns to the LPs and of course, through dividends to our existing shareholders. This slide provides more granularity on the makeup of our assets under management by asset class, investor type and fund type as at the 31st of March. And combined, these typically long-dated or evergreen funds are generating, as I've said, that fee margin of circa 2%. And that is across 67 fund mandates that we are now managing. And the breadth of those mandates means that we are increasingly able to either equity invest or lend throughout the United Kingdom. This slide shows our consolidated profit and loss account, and I think there's 2 or 3 important things to draw out here. Firstly, I think what's interesting is that whilst the revenues of the business grew by GBP 4 million, the cost base only grew by GBP 2 million. And there is the example of economies of scale where we are able to now drive the top line, but the growth in our cost base is much lower than it has historically been when we were managing lower quantities of assets under management. I think the next thing to note is that the finance income remains strong. Most of that finance income line is deposit interest on our GBP 40-or-so million of cash on deposit, and we've been earning during the past 12 months, circa 4%, 4.5% with our money on deposit. I think the next thing that's quite interesting is that for the first time, not the only time, but for the first time in a few years, we've earned performance fees from managing the 3 Northern VCTs. We did earn significant performance fees in the early years after we acquired the VCT contracts. And it's pleasing to see that the performance of the VCT NAVs has now resulted in Mercia once again being entitled to a performance fee. Of that performance fee, we've agreed with the VCT Boards that we will distribute 80%, including employers NI, to the VCT investment team who are managing the 3 Northern VCTs. This next slide is our consolidated balance sheet. And as you can see there, the strength of the balance sheet through principally the direct investment portfolio at GBP 126 million, which Mark will talk to shortly, the GBP 40 million of cash and overall, a very strong balance sheet at GBP 188 million. And what that is enabling us to do now is not only to increase the dividend, but also to announce a new policy, which is an annual GBP 3 million share buyback where shares bought back will be canceled from this new policy. The next slide is our consolidated statement of cash flows, which is a very simple cash flow statement. I'm pleased to say you can see there the top line, GBP 8.7 million generated from operating cash flow. The GBP 9.7 million invested during the year in the direct investment portfolio, a considerable reduction on prior year as the portfolio continues to mature and therefore, require lower levels of investment. We said at the start of Mercia '27 that we anticipated the balance sheet portfolio needing no more than GBP 25 million over the next 3 years. And as you can see here, so far, we've invested GBP 10 million of that GBP 25 million, and we still anticipate the portfolio over the remaining 2 years requiring no more than a further GBP 15 million. Also on this slide, you can see the interest received from our cash deposits, the full payment of the final deferred consideration on the acquisition of Frontier Development Capital, which is continuing to perform extremely well, dividends paid in the prior year and the final purchase of the original GBP 5 million share buyback. One of the things we're focused on as a Board with our capital allocation policy is carefully monitoring how we are enabling increasing shareholder returns. And one way of looking at that -- this is to calculate a theoretical return percentage known as the weighted average cost of capital. Not easy to do when you have no debt on your balance sheet. But nevertheless, we've applied the calculation, and we've come up with an approximate weighted average cost of capital of 9%. We did ask ChatGPT what it thought our WACC should be and ChatGPT's response was 10%. So I think we're in the right ballpark. The important point about this is it sets a benchmark or a hurdle above which what we do with our shareholders' money, we should be exceeding that hurdle. And down below in this slide is the example of our 3 acquisitions to date since our IPO. And you can see there that the return on invested capital thus far from each of the 3 acquisitions exceeds our weighted average cost of capital. And that's really important because that's what that is telling us is that the investments we've been making of shareholders' money into these acquisitions is paying dividends. Thank you.

Thank you, Martin. So next ample of slides will just reflect on the progress of the group and the outlook going forward. As I said at the very beginning, this is 10 years now on AIM. And every 3 years, the group has grown by circa 100%. So fulfilling the growth aspirations of Mercia going forward for the Mercia '27, I think fits very neatly within that paradigm. On pretty much every metric that you want to look at, whether it's third-party funds grow from GBP 23 million to GBP 1.8 billion revenue growth, profitability growth, you can see strong growth throughout the group. I think quite importantly, as we start to benefit from sort of scale economies, another piece that we're doing is we are writing larger checks. So investing larger amounts of capital, which requires the same amount of resource utilization is a great way of driving efficiency and productivity through the group. And the other piece to pull out from this is the fact when Martin and I were on the market when we were basically raising our IPO capital, the GBP 70 million when we came to market, there was a degree of cynicism seen that there are -- the reason why there's no money chasing deals in the regions, there are no deals worth doing. I'm really pleased to say 10 years later, and this is just from equity realizations, we have returned over GBP 800 million back to our balance sheet and our managed funds, clearly demonstrating a fact that 85% of what we do is outside of London, outside of the Southeast, that there are returns to be made outside of that area. And just on to the balance sheet direct investments. Here, they are listed by value, by our holding value. You can see on the left, you see the date when we first made the investment and then the starting position, so GBP 117 million at the start of this financial year, GBP 9.7 million invested across the portfolio, the realization of the smaller investment there, Artesian, bringing back GBP 601,000. Realized gains and losses, we have a realized loss, which was Sherlock Biosciences. So that's moved the GBP 340,000 and then the fair value movements across the direct investments, the ups and downs pretty much cancel each other out to sort of close out on the GBP 274,000 position. Then what that means is the closing position for the group of the direct investments is circa GBP 126 million at year-end. I think finally on this table is the important observation about the size of the equity stakes that we hold in these businesses, typically ranging from 20% to 40%. But all of these businesses also have Mercia fund positions in them. So often, our holding in these businesses across the group is over 50%. But our influence, albeit very strong, our control is nonexistent. We do not control these businesses. We have board seats on most of them and our influence is very strong. And that's important when we think about the balance sheet unwinding over time during this Mercia '27 and adds credibility and credence to that moving forward. These are our top 10 assets by value. So Netacea is a Manchester-based business in revenue growth. It's bot detection. So bot detection and mitigation sits on customer side, server side with some very well-known blue-chip clients. Voxpopme is a video analytics for the market research arena. That's in revenue growth, just moving to breakeven. That's a business based in Birmingham with a U.S. operation. We've got Warwick Acoustics, which is working within the automotive sector under OEMs, looking at integrating its speaker technology, which is lightweight, flexible, low-energy electrostatic speakers, and that is about to be rolled out into the first automotive partner, and we expect that in September. It's also got a headphone, high-end headphone set, which is in strong revenue growth. And that's in -- and that business is in revenue growth as well. The Cards, The Universe And Everything that's based just outside of London. That's a virtual trading platform. It's got 2 games now. It's in revenue growth, just under breakeven now. Medherant has got a significant partnership with Bayer, is in revenue generation with that partnership. It's also got its own program of development, which is a testosterone patch addressing the HRT arena. That's a business based in Coventry now. Eyoto based in Birmingham, that's got a remote slit lamp, optometry application. That business is progressing well now, actually making early sales. And that's one just reflecting back a few years, we took a heavy provision and restructured that business, and that business has come out, repointed now in a much better direction. Invincible Studios Soccer Manager, this is a football management platform on a multi-platform focused predominantly in the mobile space. That's in strong revenue growth and is profitable. Locate Bio, this is the one asset actually here that fits outside of the Mercia '27. This is a much earlier business. It's developing a bone regeneration product. It's yet to go into the clinic with that. And we think that, that's a longer journey. So it falls outside of the Mercia '27 scope. That's a Nottingham-based business. Intelligent Positioning, which is an SEO platform that's in revenue growth, is now at cash breakeven and into profitability. That business is based in Brighton. And then the final one is a business called Aonic, which acquired nDreams a little while ago, and this is the residual stake that we have in this business. Now this business is growing strongly. It's a PE-backed buy-and-build gaming business. It's a highly profitable gaming business, and we'll be looking at an IPO when the market is open. And it is the one business in this particular piece that is dependent on the public market opening. That happens when we will look to take out our position. All of these businesses are under advisement. Locate Bio is the one business, as I said, falls outside of the Mercia '27 arena. The other businesses that we have advisers supporting us to look to move these businesses out and divest those businesses within the next 18, 24 months. We really do seriously consider ourselves as a responsible investment with sustainability at the heart of what we do. And for us, sustainability is progress and scale and frankly, doing the right thing. And for this, this is quite a key differentiator and an important part for our institutional funds that are with us and the ones that are looking to back us in terms of new funds under production. They are seeing this as a very key metric to manage, to measure the managers that they want to support. We have Bancy who's joined us as a dedicated sustainable manager, and she is integrating all elements of ESG from our deal origination through transactions, through business development and exit. We have a number of bodies that we're a member. I'm a great believer if you measure it, it happens. Just to pull one of those out, which I think has had great progress is one of the early ones that we committed to, which was investing in Women Code, and that's where we've been developing talent within the business ground up, but also on a senior level, making sure we have the talent coming down. So if you look at our Board, half of our NEDs are women. If you look at the execs, 1/3 are the executive committee that runs and delivers the strategic plan that we've been talking about, 50% women, in total, 40% women. So for a financial services business, that's great progress we're making, and we're making great progress in those other areas as well, which is critical in terms of winning new fund mandates and winning new funds. And this really reflects us in this axis here, where we're seeing strong growth in terms of our assets under management, which are predominantly funds under management. And so when we use the interplay between AUM and FUM, so FUM is third-party capital we're managing, AUM is then the addition of our cash, our balance sheet direct investments and our intangibles. So that's the delta between AUM and FUM. So of the GBP 2 billion that we have in AUM, GBP 1.8 billion is in third-party funds. And we see that growth metric continuing. So as we go towards the 3-year plan and the end of the 3-year plan 31st of March 2027, you can see growth across those assets, but predominantly driven by real assets, which would comprise of institutional and retail investors. So just in summary, and I hope you agree with us, is that we are very much right place, right time. There are strong domestic growth prospects across the U.K. as well as on a regional basis within the private markets. And we just see capital coming towards this space. We're highly diversified in terms of deal origination, in terms of asset class and importantly in terms of investor type. The revenue is predictable and recurring, circa 80% recurring, and we benefit currently from a blended fee margin of circa 2%. But importantly, as we look to our shareholders, and we're very grateful for the support we've received over the 10 years, we are looking now to increasingly return back to shareholders through our progressive dividend policy and through the commencement of our annual buyback. Thank you very much for your attention.

[Operator Instructions] Just while the company takes a few moments to review those questions submitted today, I'd like to remind you the recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via investor dashboard. As you can see, we received a number of questions throughout today's presentation, can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

Sorry, there is -- I don't know why, but I have no questions on my screen, and I know there will be questions. I'm just looking across Martin's.

Yes, I can only see actually one question, which is in relation to the VCTs, which says you generated performance fees from the VCTs for the first time. Actually, this year isn't the first time, as I mentioned earlier, we did receive actually in total, GBP 6 million of performance fees in the early years after we acquired the VCT contracts at the end of 2019.

And just while -- and hopefully, this can be sorted out so we can see the other questions. We just can't see them sadly. But -- we had 2 questions submitted to us, which was how is Mercia using AI and what is Mercia's approach to sustainability and is it helping with fundraising? So in terms of using AI, I think the first is a one-word answer, which is carefully is we are using that. So we're using it in 2 broad approaches. So we have quite a sophisticated outreach mechanism where we're reaching out to potential investees and prospective investees, and that is working extremely well actually. And the other piece is within our own data. So it's a sort of tenant basis where we're basically ring-fencing our own data and using that to interrogate via a large language model and Copilot. So that is the way we're using it internally. And that is really to use the vast amount of data that we've accumulated over a decade with various systems, but to ensure that it remains proprietary because I'm sure many of you know that the moment you take it out to a ChatGPT or something, it goes into the public domain, and that is not good for one's proprietary data. So yes, we are using AI. We are using it very carefully, and we see its opportunity and strength with us and with our portfolio. We do a number of seminars with our portfolio. And internally, we do that as well, so that we can get up to speed with the right application of it. And then in terms of the second question, which was what's Mercia's approach to sustainability and is it helping us with fundraising? I'm hoping that slide on sustainability that was on there, it is critical. So Dean, who heads up our institutional investment, has said very clearly that this is an important tenet of what we're doing in terms of going out and fundraising. We are monitored and measured and we have detailed questionnaires from pension funds, et cetera, about that, also from British Business Bank and also from intermediaries with retail. It's important, but it's something we do, and we passionately believe in as well. And it fits very much with this sort of impactful investment, this place-based impactful investment that we are well known for in respect of commercial returns as well. There is no way we would be able to manage capital without commercial returns.

Right. So I can now see the questions. So perhaps, Mark, if I may, I'll at least bring up to you in descending order. So the next question is, given your strong trajectory, how are you positioning Mercia against larger asset management firms? And what do you view as your key competitive advantage?

Yes. So I mean it's really -- I mean, I'm just going to step back from that question because we -- so for the first time ever, we are having institutional funds reach out to us. So this is a new development for it. And this is, I'm sure, because of the Mansion House Accord and the Mansion House Compact, where there is an increasing pressure to deploy capital domestically. And if you're a local government pension scheme, that's not just domestically, that's locally. So there's increasing pressure in that respect. So yes, we are often asked, are there other Mercias out there? And if you look at how many domestic-focused regional managers are, there's only a handful. So the next point then is so how much can you manage? And that's, I think, a really critical point because as you get consolidation within this institutional sector, you'll get a requirement for new and larger funds. Now LTAFs, which is a new product coming through, is enabling, if you like, a multi-asset approach of assigning pieces to different managers. I think that is one solution. But the other solution is real assets. A venture fund will only ever be if it's domestically pointed GBP 100 million, GBP 200 million, GBP 300 million, whereas actually, you can go into real assets and you can go GBP 300 million, GBP 500 million, GBP 1 billion. And that's why we anticipate that growth coming from real assets is because some of this -- a lot of this institutional capital will be looking for that more risk-profiled approach that we do on a smaller scale, but on a larger scale.

So the next question is in 4 or 5 parts, actually. So if I may, I will read them one at a time. So first question is in relation to the investments post year-end into the Axis Spine and Warwick Acoustics, were those recent funding rounds post year-end at or above holding value? And did third-party investors come into that -- those rounds?

Okay. Well, the answer to that is yes. So we did have third-party investors into those rounds. And yes, they were the holding value.

Good. The next multipart question is, what's the pipeline in terms of new regional fund launches or new tranches?

So that's a really excellent question actually because it's really important. Now for those that like me are obsessed with what's going, I have to face in many directions. And what British Business Bank are being told by the government to do is really important to us because we manage a big portion of British Business Bank capital, and we believe we could manage more. So there was a larger allocation through the spending group to British Business Bank. So it's not just about existing mandates, it's not just about the original allocations into existing mandates, it's about larger allocations into existing mandates as well as new ones. And we'll see more and more BBB like, for instance, the Evolution fund. So the Evolution fund has an institutional pension fund in it, but it also has a subsidiary of British Business Bank, which is BBI they're invested in. So we're seeing more and more of these discrete pools of capital moving together, and we would expect BBB to be more involved with retail, with family offices, with wealth managers as well as institutions. So we are looking at increased allocations, not this year, but would be probably next year into the recent fund mandate wins. And we are acutely aware that there's at least 2 more geographies that are coming out on a regional basis for new funds going through, and we will consider those. And we will, of course, be looking. We are easily meeting our deployment targets for our regional funds. So we will be considering re-upping, if you like, getting new allocations within the existing funds. There are other conversations ongoing with BBB. We believe we can help them fulfill their mandate as they look to operate against these 8 pillars of the industrial strategy, pointing capital domestically and regionally. We think we're very well placed to help them.

Thank you, Mark. The next one is, does the potential consolidation of -- I think here, it means the local government pool pension schemes. Does that potential consolidation matter to us?

So it doesn't matter to us because we have relationships with them individually and those relationships will continue throughout the consolidation. It does speak to what I was saying before, which is bigger is better. And that's really at the heart of our sort of go further, go faster theme because that's what we need to do. We need to grow as an asset manager, and we need to grow the size of funds under management because there's one thing that's for sure over the next 5 years is the capital allocations to individual funds will grow too.

Next question is how many of the direct investment portfolio are profitable and/or cash flow positive?

So I will give the wrong answer if I say that. But of the 10 that -- I don't if I do it like that. Of the 10 -- you have to forgive me, I'm just scrolling through the slides. So there were 10 that I highlighted, which were on Slide 22. So Netacea is loss-making, but it's closing the gap. Voxpopme is breakeven. Warwick Acoustics is small, but loss-making. The Cards, The Universe And Everything is basically breakeven now. Medherant is loss-making. Eyoto is loss-making. Invincibles Studios is profitable. Locate is very young in its journey and is loss-making. Intelligent Positioning is profitable and cash generative, as is Aonic.

Great. Thank you, Mark. So moving on to the next group of questions, if I may. With a significant number of portfolio exits, I think this is the balance sheet planned, what factors will most influence your decision-making on timing and pricing for these divestments?

So all 20 have been reviewed. So what we did before -- so just stepping back, so Mercia '27 was a year in the making, if that makes sense. So there was a strategic review for the 12 months before. And part of that strategic review was to look with advisers at all of our portfolio companies and ask when can we exit them and what are the metrics that will drive towards making these salable assets? And that's why we arrived at 70%, not 100% because clearly, the timings, and Locate is a good example, clearly, the timing of those would fall outside of that scope from those advisers who are sector specialists who we have engaged on the portfolio. And it's back to our position as we have quite the influence on these portfolios, we have full alignment in terms of shareholders in these businesses, and we're working with management teams in terms of exit trajectories as well. We have a number of metrics. Some of them are ARR multiples, some of them are breakeven multiples, some of them are -- if you look at Warwick Acoustics, it's a case of one OEM delivering in terms of in-market supply, one OEM integrating. So there's a whole bunch of different metrics on that, that we're driving through. We are optimistic that we can move those through. The one that, I guess, is the one challenge is Aonic because it's dependent on the IPO window opening, and that's something outside of our influence. As far as the others go, this to do with commercial technical traction.